CHAPTER

Marketing
in Todays
Economy
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Introduction
Commoditization

A consequence of mature industries, where slowing

innovation, extensive product assortment, excess
supply, and frugal consumers force margins to the
floor.

All

organizations both for-profit and nonprofit

require effective planning and a sound
marketing strategy to achieve their goals and
objectives.

Todays

economy is characterized by rapid

technological change, economic/financial
anxiety, and increasing consumer skepticism.
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The Challenges and Opportunities

of Marketing in Todays Economy
Power

shift to customers

Massive

increase in product selection

Audience

and media fragmentation

Changing

value propositions

Shifting

demand patterns

Privacy,

security, and ethical concerns

Unclear

legal jurisdiction
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Change in Daily Media Usage by

U.S. Adults, 2008-2011 (Exhibit 1.1)

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The Childrens Online Privacy

Protection Act (Exhibit 1.2)

5
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Increasing customer power is a

continuing challenge to
marketers in todays economy. In
what ways have you personally
experienced this shift in power;
either as a customer or as a
business person? Is this power
shift uniform across industries
and markets? How so?

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Basic Marketing Concepts:

Marketing Defined
Marketing

.the process of planning and executing the

conception, pricing, promotion, and distribution of ideas,
goods, and services to create exchanges that satisfy
individual and organizational objectives.

Marketing

(2005 AMA definition)

an organizational function and a set of business

processes for creating, communicating, and delivering
value to customers and for managing customer
relationships in ways that benefit the organization and its
stakeholders.

Marketing

(1985-2005 AMA definition)

(2007 AMA definition)

the activity, set of institutions, and processes for

creating, communicating, delivering, and exchanging 7
offerings that have value for customers, clients, partners,

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Basic Marketing Concepts:

What is a Market?
Market

A collection of buyers and sellers; a group of

individuals or institutions that have similar needs

Marketspace

Electronic marketplaces unbound by time or space

Metamarket

A cluster of closely related goods and services that

center around a specific consumption activity

Metamediary

Provides a single access point where buyers can locate

and contact many different sellers in the metamarket
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Common Metamarkets and

Participants (Exhibit 1.3)

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Basic Marketing Concepts:

What Is Exchange?
Exchange

The process of obtaining something of value by

offering something in return; typically obtaining
products for money

Five

Conditions of Exchange

There must be at least two parties to the exchange.

Each party has something of value to the other party.
Each party must be capable of communication and
delivery.
Each party must be free to accept or reject the
exchange.
Each party believes it is desirable to exchange with
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the other party.

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Basic Marketing Concepts:

What Is a Product?
Product

Something that can be acquired via exchange to

satisfy a need or a want

Examples

of Products

Goods
Services
Ideas
Information
Digital products

People

Places

Experiences and events

Real or financial property

Organizations

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Basic Marketing Concepts:

Utility
Utility

The ability of a product to satisfy a customers needs

or wants

Five

Types of Utility

Form utility attributes or features that set the

product apart
Time utility products available when customers want
them
Place utility products available where customers
want them
Possession utility transfer of ownership or title; ease
of acquisition
Psychological utility positive experiential attributes12

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Major Marketing Activities and

Decisions
Strategic

Strategy the organizations game plan for success

Tactical planning specific markets/segments and the
marketing programs that will meet their needs/wants
Marketing plan the outline of the marketing program

Research

Planning

and Analysis

Internal analysis analyzing the firms current

strategy and performance
Competitive intelligence analyzing competing
businesses
Environmental scanning analyzing the external
environment
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Situation analysis combination of all three analyses

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How concerned are you about

privacy and security in todays
economy? Why do so many
people, particularly younger
people, seem to be unconcerned
about privacy? Will these issues
still be important in 10 years?
Explain.

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Major Marketing Activities and

Decisions (continued)
Developing

Competitive Advantage

Competitive advantage something the firm does

better than competing firms

SWOT analysis strengths, weaknesses, opportunities,

threats

Marketing

Strategy Decisions

Market segmentation and target marketing

Marketing program decisions (the marketing mix)
Branding and positioning

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Major Marketing Activities and

Decisions (continued)
Social

Responsibility and Ethics

Social responsibility maximizing positive impact on

society, while minimizing negative impact
Marketing ethics principles/standards that define
acceptable conduct in marketing activities

Implementation

and Control

Process of executing the marketing plan

Marketing activities must be controlled to ensure that
the strategy stays on course.

Developing

and Maintaining Customer

Relationships

Transactional marketing

Relationship marketing

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Transactional and Relationship

Marketing (Exhibit 1.4)

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The Challenges of Marketing

Strategy
Unending

Change

People-Driven
Lack

Nature of Marketing

of Rules for Choosing Marketing Activities

Increasing
Declining

Customer Expectations

Customer Satisfaction and Brand

Loyalty
Competing

in Mature Markets

Increasing commoditization
Little real differentiation among product offerings

Aggressive

Cost-Cutting Measures

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The text argues that marketing

possesses very few rules for
choosing the appropriate
marketing activities. Can you
describe any universal rules of
marketing that might be applied
to most products, markets,
customers, and situations?

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American Customer Satisfaction

Index (Exhibit 1.5)

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